• The value of an MGA is protected and even enhanced by the insurance software it uses to execute its expertise and know-how, making this IP transferable and scalable at the same time.
  • MGAs remain a prime acquisition target for private equity and insurers and the value for an acquirer is embodied in its know-how and IP.  This includes pricing algorithms, underwriting methodologies, data models and decision engines.
  • By using modular, API-first core insurance software to integrate with existing specialised  know-how and systems, MGAs can retain the value driving their strategic advantage without overhauling existing tech stacks. 

MGAs are the makers in the middle

MGAs build insurance. They are masters of distribution because they understand the market and are able to meet its requirements. 

They are the makers in the middle, operating in the zone between carriers and customers to discover and deliver the products and experiences we really want.

Illustration of MGAs connecting carriers, brokers and customers, symbolising their role as builders and enablers in the insurance ecosystem.

The intellectual property developed in doing so is central to their ability to price risk accurately, serve niche markets and grow profitability. 

IP is more than patents and trademarks. It’s also the unique, hard-won expertise and know-how embedded in:

  • Pricing algorithms - proprietary logic to rate and quote policies, tailored to niche segments of the market
  • Underwriting methodologies - risk assessment models honed over time by specialised sector experience
  • Claims processes - custom rules and workflows designed to balance efficiency with loss ratio performance
  • Data models - internal datasets and analytics built from proprietary claims and policyholder data
  • Automation and decision engines  - tools developed to apply underwriting rules, triage claims or assess fraud automatically

It’s this specialisation that drives success for MGAs, by tailoring coverage, pricing and service to niche clients, and design underwriting rules and pricing models that carriers can’t easily replicate.

This is a MGA’s “secret sauce”.

An MGA’s value is in its insurance software

As M&A activity amongst MGAs and retail brokers continues trending upwards, MGAs are a prime target for acquisition by private equity and insurers.

When insurers and investors evaluate an MGA, what they are really buying is proprietary insights and execution capability, all of which lives in the IP.

This manifests as repeatable underwriting performance, unique pricing capabilities, strong customer retention and outcomes and the ability to attract and retain underwriting talent. 

But, the hidden value of your MGA is in the insurance software you use that encapsulates this know-how, making it transferable and scalable.

Insurance software should amplify, not dilute an MGA’s value

As the rate of technology adoption in the insurance industry increases, MGAs are at a crossroads when deciding on the right technology strategy. Protecting and maximising the value of a MGA’s know-how and IP must be a key consideration when making this decision.

Legacy insurance software, like carrier systems and agency management systems, are usually closed-box solutions. To “fit in”, MGAs likely have to rebuild their pricing logic or share proprietary data with third parties.

Many core insurance platforms simply lack the ability to integrate into existing pricing, underwriting, claims systems or third party platforms in the insurance ecosystem at all as they lack robust APIs.

By using modular, API-first core insurance software MGAs can integrate with existing specialised  know-how and systems - their “secret sauce” - without overhauling their existing tech stack. 

With APIs and system interoperability, MGAs can:

  • Keep proprietary pricing in separate, existing engines
  • Maintain control over sensitive logic and algorithms
  • Connect IP-enriched tools to policy and claims workflows securely

In short, their IP remains theirs and their value is preserved. 

Instead of diluting or exposing value, a core insurance platform can become the backbone that supports and scales strategic advantage.

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‍Schedule a call with one of our experts to find out more about how we can help you support and scale your MGA’s strategic advantage with our API-first, end-to-end core insurance software.